• United Community Banks, Inc. Reports Fourth Quarter 2022 Results

    Source: Nasdaq GlobeNewswire / 17 Jan 2023 16:30:01   America/New_York

    GREENVILLE, S.C., Jan. 17, 2023 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the 2022 fourth quarter was $81.5 million and pre-tax, pre-provision income was $125.9 million. Diluted earnings per share of $0.74 for the quarter represented an increase of $0.19 or 35%, from the fourth quarter a year ago, and was flat from the third quarter of 2022. On an operating basis, United’s diluted earnings per share of $0.75 was up 17% from the year ago quarter. The primary drivers of the increased earnings in both periods were increased interest rates and organic loan growth, as well as the acquisition of Reliant Bancorp, Inc., which closed on January 1, 2022 and was not reflected in the year-ago quarter. United’s return on assets was 1.33%, or 1.35% on an operating basis. Return on equity was 10.9% and return on tangible common equity was 15.2%. On a pre-tax, pre-provision basis, operating return on assets was 2.09% for the quarter. Highlights for the quarter include strong annualized loan growth of 12%, 19 basis points of net interest margin expansion and further improvement in the efficiency ratio to 47.95%, or 47.35% on an operating basis, which excludes the effect of merger-related and other charges.

    Chairman and CEO Lynn Harton stated, “We are pleased with our performance during this quarter and in 2022. In the quarter, our loan growth across all categories was strong and our net interest margin continued to benefit from increasing interest rates. As a result, we generated positive operating leverage, resulting in a new record efficiency ratio for us.” Harton continued, “On the strategic front, we continue to benefit from the acquisitions we have completed over the past few years. These new partnerships have expanded the company into exciting growth markets and have brought talented bankers to United. While not included in these quarterly results, we are excited that we have now completed the addition of Progress Financial Corporation to the United family on January 3, 2023. Progress has a talented team, exceptional leadership, and operates in great markets in Alabama and the Florida Panhandle. I am very glad to welcome them to our team.”

    The net interest margin increased by 19 basis points to 3.76% from the third quarter, while the average yield on interest-earning assets was up 49 basis points to 4.32% and United’s cost of deposits increased by 30 basis points to 0.49%. Net charge-offs increased to $6.6 million or 0.17% of average loans during the quarter, mainly driven by one C&I loan, and NPAs were up slightly from prior quarters to 18 basis points relative to total assets.

    Mr. Harton concluded, “2023 will be another great year for United despite some changes in the environment. Deposit competition will continue to increase as depositors seek higher returns for their excess liquidity. Well publicized recession fears may drive increasing provision costs for the industry. We believe we are well prepared to navigate these conditions due to the strength of our balance sheet, and more importantly, the strength of our teams. In 2022, we further strengthened our Board of Directors, added new market leaders, new commercial bankers and new line-of-business leaders. We also expanded our service capabilities with new locations across our footprint. In closing, I would note that we are all very proud that in October, United was named one of the “Best Banks to Work For” by American Banker for the sixth consecutive year. Everything begins with being a great place to work for great people. One of my goals for the year is to do an even better job of making sure we keep our company feeling small and connected as we continue to grow.”

    2022 Financial Highlights:

    • Completed successful year with strong loan growth and historically high pre-credit profitability, and completed an acquisition in the high-growth Nashville, Tennessee MSA, which was a strategic priority
    • Full year EPS of $2.52, a decrease of 15% compared to 2021; full year operating EPS of $2.66, a decrease of 14% from 2021
    • Return on assets of 1.13%, or 1.19% on an operating basis
    • Pre-tax, pre-provision return on assets of 1.80% on an operating basis
    • Return on common equity of 9.5%
    • Return on tangible common equity of 14.0% on an operating basis
    • A provision for credit losses of $63.9 million compared to a release of provision of $37.6 million in 2021, with $18.3 million attributable to establishing an initial allowance for loans acquired in the first quarter in the Reliant acquisition
    • Strong loan growth of $3.6 billion or $1.3 billion excluding loans acquired from Reliant and PPP loans
    • Core transaction deposits were up $1.3 billion compared to 2021; excluding Reliant, 2022 core transaction deposits were down $819 million, or 5.7%, reflecting runoff following 2021’s pandemic-related deposit surge
    • Net interest margin of 3.38%, which was up 31 basis points from last year primarily due to increased interest rates
    • Noninterest income was down 12.7% primarily due to a decline in mortgage fees, as higher rates softened demand
    • The efficiency ratio of 52.3%, or 50.2% on an operating basis, was improved as the combination of higher rates and the achievement of merger-related efficiencies drove the ratio to record low levels
    • Net charge-offs remained low at just $9.7 million, or 0.07% of average total loans

    Fourth Quarter 2022 Financial Highlights:

    • Net income of $81.5 million and pre-tax, pre-provision income of $125.9 million
    • EPS increased by 35% compared to fourth quarter 2021 on a GAAP basis and 17% on an operating basis; compared to third quarter 2022, EPS remained flat on a GAAP basis and on an operating basis
    • Return on assets of 1.33%, or 1.35% on an operating basis
    • Pre-tax, pre-provision return on assets of 2.09% on an operating basis
    • Return on common equity of 10.9%
    • Return on tangible common equity of 15.2% on an operating basis
    • A provision for credit losses of $19.8 million, which increased the allowance for loan losses to 1.04% of loans from 1.00% in the third quarter
    • Loan production of $1.5 billion, resulting in loan growth of 12%, annualized for the quarter
    • Core transaction deposits were down $915 million; or 22% annualized
    • Net interest margin of 3.76% was up 19 basis points from the third quarter, due to increased interest rates and loan growth
    • Mortgage closings of $253 million compared to $522 million a year ago; mortgage rate locks of $364 million compared to $695 million a year ago
    • Noninterest income was up $1.4 million on a linked quarter basis, primarily driven by positive marks on certain investments and offset by lower mortgage fees
    • Noninterest expenses increased by $4.6 million compared to the third quarter on a GAAP basis and by $4.9 million on an operating basis, mostly due to lower deferred costs from lower mortgage loan volume and higher FDIC deposit insurance costs
    • Efficiency ratio of 48.0%, or 47.4% on an operating basis
    • Net charge-offs of $6.6 million, or 17 basis points as a percent of average loans, up 14 basis points from the net charge-offs experienced in the third quarter
    • Nonperforming assets of 0.18% of total assets, up 3 basis points compared to September 30, 2022
    • Quarterly common shareholder dividend of $0.22 per share declared during the quarter, an increase of 10% year-over-year
    • After the end of the quarter, we completed the acquisition of Progress Financial Corporation and its banking subsidiary Progress Bank and Trust with $1.8 billion in assets on January 3, 2023; financial returns are expected to be within our desired thresholds

    Conference Call

    United will hold a conference call on Wednesday, January 18, 2023, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. Participants can pre-register for the conference call by navigating to https://dpregister.com/sreg/10174303/f57c53ab13. Those without internet access or unable to pre-register may dial in by calling 1-866-777-2509. Participants are encouraged to dial in 15 minutes prior to the call start time. The conference call also will be webcast and can be accessed by selecting “Events and Presentations” under “News and Events” within the Investor Relations section of the company's website, www.ucbi.com.

     
    UNITED COMMUNITY BANKS, INC.
    Selected Financial Information
    (in thousands, except per share data)
       2022   2021  Fourth
    Quarter
    2022-
    2021
    Change
    		 For the Twelve Months
    Ended December 31,    		 YTD
    2022-
    2021
    Change
      Fourth
    Quarter    		 Third
    Quarter    		 Second
    Quarter    		 First
    Quarter    		 Fourth
    Quarter    		   2022   2021  
    INCOME SUMMARY                  
    Interest revenue $240,831  $213,887  $187,378  $171,059  $143,768    $813,155  $578,794   
    Interest expense  30,943   14,113   8,475   7,267   6,213     60,798   29,760   
    Net interest revenue  209,888   199,774   178,903   163,792   137,555  53%  752,357   549,034  37%
    Provision for credit losses  19,831   15,392   5,604   23,086   (647)    63,913   (37,550)  
    Noninterest income  33,354   31,922   33,458   38,973   37,177  (10)  137,707   157,818  (13)
    Total revenue  223,411   216,304   206,757   179,679   175,379  27   826,151   744,402  11 
    Noninterest expenses  117,329   112,755   120,790   119,275   109,156  7   470,149   396,639  19 
    Income before income tax expense  106,082   103,549   85,967   60,404   66,223     356,002   347,763   
    Income tax expense  24,632   22,388   19,125   12,385   14,204     78,530   77,962   
    Net income  81,450   81,161   66,842   48,019   52,019     277,472   269,801   
    Merger-related and other charges  1,470   1,746   7,143   9,016   9,912     19,375   13,970   
    Income tax benefit of merger-related and other charges  (323)  (385)  (1,575)  (1,963)  (2,265)    (4,246)  (3,174)  
    Net income - operating (1) $82,597  $82,522  $72,410  $55,072  $59,666  38  $292,601  $280,597  4 
                       
    Pre-tax pre-provision income (5) $125,913  $118,941  $91,571  $83,490  $65,576  92  $419,915  $310,213  35 
                       
    PERFORMANCE MEASURES                  
    Per common share:                  
    Diluted net income - GAAP $0.74  $0.74  $0.61  $0.43  $0.55  35  $2.52  $2.97  (15)
    Diluted net income - operating (1)  0.75   0.75   0.66   0.50   0.64  17   2.66   3.09  (14)
    Common stock cash dividends declared  0.22   0.22   0.21   0.21   0.20  10   0.86   0.78  10 
    Book value  24.38   23.78   23.96   24.38   23.63  3   24.38   23.63  3 
    Tangible book value (3)  17.13   16.52   16.68   17.08   18.42  (7)  17.13   18.42  (7)
    Key performance ratios:                  
    Return on common equity - GAAP (2)(4)  10.86%  11.02%  9.31%  6.80%  9.32%    9.54%  13.14%  
    Return on common equity - operating (1)(2)(4)  11.01   11.21   10.10   7.83   10.74     10.07   13.68   
    Return on tangible common equity - operating (1)(2)(3)(4)  15.20   15.60   14.20   11.00   13.93     14.04   17.33   
    Return on assets - GAAP (4)  1.33   1.32   1.08   0.78   0.96     1.13   1.37   
    Return on assets - operating (1)(4)  1.35   1.34   1.17   0.89   1.10     1.19   1.42   
    Return on assets -pre-tax pre-provision (4)(5)  2.07   1.94   1.49   1.37   1.21     1.72   1.58   
    Return on assets -pre-tax pre-provision, excluding merger related and other charges (1)(4)(5)  2.09   1.97   1.60   1.52   1.40     1.80   1.65   
    Net interest margin (fully taxable equivalent) (4)  3.76   3.57   3.19   2.97   2.81     3.38   3.07   
    Efficiency ratio - GAAP  47.95   48.41   56.58   57.43   62.12     52.31   55.80   
    Efficiency ratio - operating (1)  47.35   47.66   53.23   53.09   56.48     50.16   53.83   
    Equity to total assets  11.25   11.12   10.95   11.06   10.61     11.25   10.61   
    Tangible common equity to tangible assets (3)  7.88   7.70   7.59   7.72   8.09     7.88   8.09   
    ASSET QUALITY                  
    Nonperforming assets (“NPAs”) $44,281  $35,511  $34,428  $40,816  $32,855  35  $44,281  $32,855  35 
    Allowance for credit losses - loans  159,357   148,502   136,925   132,805   102,532  55   159,357   102,532  55 
    Allowance for credit losses - total  180,520   167,300   153,042   146,369   113,524  59   180,520   113,524  59 
    Net charge-offs (recoveries)  6,611   1,134   (1,069)  2,978   248     9,654   38   
    Allowance for credit losses - loans to loans  1.04%  1.00%  0.94%  0.93%  0.87%    1.04%  0.87%  
    Allowance for credit losses - total to loans  1.18   1.12   1.05   1.02   0.97     1.18   0.97   
    Net charge-offs to average loans (4)  0.17   0.03   (0.03)  0.08   0.01     0.07   —   
    NPAs to total assets  0.18   0.15   0.14   0.17   0.16     0.18   0.16   
    AT PERIOD END ($ in millions)                  
    Loans $15,335  $14,882  $14,541  $14,316  $11,760  30  $15,335  $11,760  30 
    Investment securities  6,228   6,539   6,683   6,410   5,653  10   6,228   5,653  10 
    Total assets  24,009   23,688   24,213   24,374   20,947  15   24,009   20,947  15 
    Deposits  19,877   20,321   20,873   21,056   18,241  9   19,877   18,241  9 
    Shareholders’ equity  2,701   2,635   2,651   2,695   2,222  22   2,701   2,222  22 
    Common shares outstanding (thousands)  106,223   106,163   106,034   106,025   89,350  19   106,223   89,350  19 

    (1) Excludes merger-related and other charges. (2) Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized. (5) Excludes income tax expense and provision for credit losses.

                   
    UNITED COMMUNITY BANKS, INC.
    Non-GAAP Performance Measures Reconciliation
    Selected Financial Information
    (in thousands, except per share data)
       2022   2021  Twelve Months Ended
    December 31,
      Fourth
    Quarter    		 Third
    Quarter    		 Second
    Quarter    		 First
    Quarter    		 Fourth
    Quarter    		  2022   2021 
    Noninterest expense reconciliation              
    Noninterest expenses (GAAP) $117,329  $112,755  $120,790  $119,275  $109,156  $470,149  $396,639 
    Merger-related and other charges  (1,470)  (1,746)  (7,143)  (9,016)  (9,912)  (19,375)  (13,970)
    Expenses - operating $115,859  $111,009  $113,647  $110,259  $99,244  $450,774  $382,669 
                   
    Net income to operating income reconciliation              
    Net income (GAAP) $81,450  $81,161  $66,842  $48,019  $52,019  $277,472  $269,801 
    Merger-related and other charges  1,470   1,746   7,143   9,016   9,912   19,375   13,970 
    Income tax benefit of merger-related and other charges  (323)  (385)  (1,575)  (1,963)  (2,265)  (4,246)  (3,174)
    Net income - operating $82,597  $82,522  $72,410  $55,072  $59,666  $292,601  $280,597 
                   
    Net income to pre-tax pre-provision income reconciliation              
    Net income (GAAP) $81,450  $81,161  $66,842  $48,019  $52,019  $277,472  $269,801 
    Income tax expense  24,632   22,388   19,125   12,385   14,204   78,530   77,962 
    Provision for credit losses  19,831   15,392   5,604   23,086   (647)  63,913   (37,550)
    Pre-tax pre-provision income $125,913  $118,941  $91,571  $83,490  $65,576  $419,915  $310,213 
                   
    Diluted income per common share reconciliation              
    Diluted income per common share (GAAP) $0.74  $0.74  $0.61  $0.43  $0.55  $2.52  $2.97 
    Merger-related and other charges  0.01   0.01   0.05   0.07   0.09   0.14   0.12 
    Diluted income per common share - operating $0.75  $0.75  $0.66  $0.50  $0.64  $2.66  $3.09 
                   
    Book value per common share reconciliation              
    Book value per common share (GAAP) $24.38  $23.78  $23.96  $24.38  $23.63  $24.38  $23.63 
    Effect of goodwill and other intangibles  (7.25)  (7.26)  (7.28)  (7.30)  (5.21)  (7.25)  (5.21)
    Tangible book value per common share $17.13  $16.52  $16.68  $17.08  $18.42  $17.13  $18.42 
                   
    Return on tangible common equity reconciliation              
    Return on common equity (GAAP)  10.86%  11.02%  9.31%  6.80%  9.32%  9.54%  13.14%
    Merger-related and other charges  0.15   0.19   0.79   1.03   1.42   0.53   0.54 
    Return on common equity - operating  11.01   11.21   10.10   7.83   10.74   10.07   13.68 
    Effect of goodwill and other intangibles  4.19   4.39   4.10   3.17   3.19   3.97   3.65 
    Return on tangible common equity - operating  15.20%  15.60%  14.20%  11.00%  13.93%  14.04%  17.33%
                   
    Return on assets reconciliation              
    Return on assets (GAAP)  1.33%  1.32%  1.08%  0.78%  0.96%  1.13%  1.37%
    Merger-related and other charges  0.02   0.02   0.09   0.11   0.14   0.06   0.05 
    Return on assets - operating  1.35%  1.34%  1.17%  0.89%  1.10%  1.19%  1.42%
                   
    Return on assets to return on assets- pre-tax pre-provision reconciliation              
    Return on assets (GAAP)  1.33%  1.32%  1.08%  0.78%  0.96%  1.13%  1.37%
    Income tax expense  0.41   0.37   0.32   0.20   0.26   0.32   0.40 
    Provision for credit losses  0.33   0.25   0.09   0.39   (0.01)  0.27   (0.19)
    Return on assets - pre-tax pre-provision  2.07   1.94   1.49   1.37   1.21   1.72   1.58 
    Merger-related and other charges  0.02   0.03   0.11   0.15   0.19   0.08   0.07 
    Return on assets - pre-tax pre-provision, excluding merger-related and other charges  2.09%  1.97%  1.60%  1.52%  1.40%  1.80%  1.65%
                   
    Efficiency ratio reconciliation              
    Efficiency ratio (GAAP)  47.95%  48.41%  56.58%  57.43%  62.12%  52.31%  55.80%
    Merger-related and other charges  (0.60)  (0.75)  (3.35)  (4.34)  (5.64)  (2.15)  (1.97)
    Efficiency ratio - operating  47.35%  47.66%  53.23%  53.09%  56.48%  50.16%  53.83%
                   
    Tangible common equity to tangible assets reconciliation              
    Equity to total assets (GAAP)  11.25%  11.12%  10.95%  11.06%  10.61%  11.25%  10.61%
    Effect of goodwill and other intangibles  (2.97)  (3.01)  (2.96)  (2.94)  (2.06)  (2.97)  (2.06)
    Effect of preferred equity  (0.40)  (0.41)  (0.40)  (0.40)  (0.46)  (0.40)  (0.46)
    Tangible common equity to tangible assets  7.88%  7.70%  7.59%  7.72%  8.09%  7.88%  8.09%


     
    UNITED COMMUNITY BANKS, INC.
    Financial Highlights
    Loan Portfolio Composition at Period-End
    (in millions)
      2022  2021 Linked
    Quarter
    Change
    		 Year over
    Year
    Change
     Fourth
    Quarter    		 Third
    Quarter    		 Second
    Quarter    		 First
    Quarter    		 Fourth
    Quarter    		  
    LOANS BY CATEGORY             
    Owner occupied commercial RE$2,735 $2,700 $2,681 $2,638 $2,322 $35  $413 
    Income producing commercial RE 3,262  3,299  3,273  3,328  2,601  (37)  661 
    Commercial & industrial 2,251  2,236  2,243  2,302  1,822  15   429 
    Paycheck protection program 1  2  10  34  88  (1)  (87)
    Commercial construction 1,598  1,514  1,514  1,482  1,015  84   583 
    Equipment financing 1,374  1,281  1,211  1,148  1,083  93   291 
    Total commercial 11,221  11,032  10,932  10,932  8,931  189   2,290 
    Residential mortgage 2,355  2,149  1,997  1,826  1,638  206   717 
    Home equity lines of credit 850  832  801  778  694  18   156 
    Residential construction 443  423  381  368  359  20   84 
    Manufactured housing 317  301  287  269  —  16   317 
    Consumer 149  145  143  143  138  4   11 
    Total loans$15,335 $14,882 $14,541 $14,316 $11,760 $453  $3,575 
                  
    LOANS BY STATE             
    Georgia$4,051 $4,003 $3,960 $3,879 $3,778 $48  $273 
    South Carolina 2,587  2,516  2,377  2,323  2,235  71   352 
    North Carolina 2,186  2,117  2,006  1,879  1,895  69   291 
    Tennessee 2,507  2,536  2,621  2,661  373  (29)  2,134 
    Florida 1,308  1,259  1,235  1,208  1,148  49   160 
    Commercial Banking Solutions 2,696  2,451  2,342  2,366  2,331  245   365 
    Total loans$15,335 $14,882 $14,541 $14,316 $11,760 $453  $3,575 


             
    UNITED COMMUNITY BANKS, INC.
    Financial Highlights
    Loan Portfolio Composition at Year-End
    (in millions)
      2022  2021  2020  2019  2018
    LOANS BY CATEGORY         
    Owner occupied commercial RE$2,735 $2,322 $2,090 $1,720 $1,648
    Income producing commercial RE 3,262  2,601  2,541  2,008  1,812
    Commercial & industrial 2,251  1,822  1,853  1,221  1,278
    Paycheck protection program 1  88  646  —  —
    Commercial construction 1,598  1,015  967  976  796
    Equipment financing 1,374  1,083  864  745  565
    Total commercial 11,221  8,931  8,961  6,670  6,099
    Residential mortgage 2,355  1,638  1,285  1,118  1,049
    Home equity lines of credit 850  694  697  661  694
    Residential construction 443  359  281  236  211
    Manufactured housing 317  —  —  —  —
    Consumer 149  138  147  128  330
    Total loans$15,335 $11,760 $11,371 $8,813 $8,383
              
    LOANS BY STATE         
    Georgia$4,051 $3,778 $3,685 $3,606 $3,323
    South Carolina 2,587  2,235  1,947  1,708  1,645
    North Carolina 2,186  1,895  1,281  1,156  1,072
    Tennessee 2,507  373  415  421  477
    Florida 1,308  1,148  1,435  —  —
    Commercial Banking Solutions 2,696  2,331  2,608  1,922  1,658
    Indirect auto —  —  —  —  208
    Total loans$15,335 $11,760 $11,371 $8,813 $8,383


           
    UNITED COMMUNITY BANKS, INC.
    Financial Highlights
    Credit Quality      
    (in thousands)      
       2022
      Fourth Quarter Third Quarter Second Quarter
    NONACCRUAL LOANS      
    Owner occupied RE $523 $877 $1,876
    Income producing RE  3,885  2,663  7,074
    Commercial & industrial  14,470  11,108  4,548
    Commercial construction  133  150  208
    Equipment financing  5,438  3,198  3,249
    Total commercial  24,449  17,996  16,955
    Residential mortgage  10,919  10,424  12,228
    Home equity lines of credit  1,888  1,151  933
    Residential construction  405  104  198
    Manufactured housing  6,518  4,187  2,804
    Consumer  53  17  25
    Total nonaccrual loans held for investment  44,232  33,879  33,143
    Nonaccrual loans HFS  —  316  317
    OREO and repossessed assets  49  1,316  968
    Total NPAs $44,281 $35,511 $34,428


       2022 
      Fourth Quarter Third Quarter Second Quarter
    (in thousands) Net Charge-
    Offs    		 Net Charge-
    Offs to
    Average Loans    (1)    		 Net Charge-
    Offs    		 Net Charge-
    Offs to
    Average Loans    (1)    		 Net Charge-
    Offs    		 Net Charge-
    Offs to
    Average Loans    (1)
    NET CHARGE-OFFS BY CATEGORY            
    Owner occupied RE $(130) (0.02)% $(90) (0.01)% $(1,496) (0.23)%
    Income producing RE  (113) (0.01)  176  0.02   (116) (0.01)
    Commercial & industrial  4,577  0.81   (744) (0.13)  (302) (0.05)
    Commercial construction  (77) (0.02)  10  —   (144) (0.04)
    Equipment financing  1,658  0.50   1,121  0.36   907  0.31 
    Total commercial  5,915  0.21   473  0.02   (1,151) (0.04)
    Residential mortgage  (33) (0.01)  (66) (0.01)  (51) (0.01)
    Home equity lines of credit  (89) (0.04)  (102) (0.05)  (346) (0.18)
    Residential construction  (23) (0.02)  (109) (0.11)  (76) (0.08)
    Manufactured housing  246  0.32   220  0.30   135  0.20 
    Consumer  595  1.61   718  1.98   420  1.18 
    Total $6,611  0.17  $1,134  0.03  $(1,069) (0.03)
                 
    (1) Annualized.            


     
    UNITED COMMUNITY BANKS, INC.
    Consolidated Balance Sheets (Unaudited)
    (in thousands, except share and per share data)
         
      December 31,
    2022    		 December 31,
    2021
    ASSETS    
    Cash and due from banks $195,771  $144,244 
    Interest-bearing deposits in banks  316,082   2,147,266 
    Federal funds and other short-term investments  135,000   27,000 
    Cash and cash equivalents  646,853   2,318,510 
    Debt securities available-for-sale  3,614,333   4,496,824 
    Debt securities held-to-maturity (fair value $2,191,073 and $1,148,804, respectively)  2,613,648   1,156,098 
    Loans held for sale at fair value  13,600   44,109 
    Loans and leases held for investment  15,334,627   11,760,346 
    Less allowance for credit losses - loans and leases  (159,357)  (102,532)
    Loans and leases, net  15,175,270   11,657,814 
    Premises and equipment, net  298,456   245,296 
    Bank owned life insurance  299,297   217,713 
    Accrued interest receivable  72,807   42,999 
    Net deferred tax asset  129,313   41,322 
    Derivative financial instruments  50,636   42,480 
    Goodwill and other intangible assets, net  779,248   472,407 
    Other assets  315,423   211,199 
    Total assets $24,008,884  $20,946,771 
    LIABILITIES AND SHAREHOLDERS’ EQUITY    
    Liabilities:    
    Deposits:    
    Noninterest-bearing demand $7,643,081  $6,956,981 
    NOW and interest-bearing demand  4,350,878   4,252,209 
    Money market  4,510,680   4,183,354 
    Savings  1,456,337   1,215,779 
    Time  1,781,482   1,442,498 
    Brokered  134,049   190,358 
    Total deposits  19,876,507   18,241,179 
    Short-term borrowings  158,933   — 
    Federal Home Loan Bank advances  550,000   — 
    Long-term debt  324,663   247,360 
    Derivative financial instruments  99,543   25,145 
    Accrued expenses and other liabilities                298,564                 210,842 
    Total liabilities           21,308,210            18,724,526 
    Shareholders' equity:    
    Preferred stock, $1 par value: 10,000,000 shares authorized; Series I, $25,000 per share liquidation
      preference; 4,000 shares issued and outstanding    		                   96,422                    96,422 
    Common stock, $1 par value; 200,000,000 shares authorized; 106,222,758 and 89,349,826 shares issued and outstanding, respectively                106,223                    89,350 
    Common stock issuable; 607,128 and 595,705 shares, respectively                   12,307                    11,288 
    Capital surplus             2,306,366              1,721,007 
    Retained earnings                508,844                 330,654 
    Accumulated other comprehensive loss               (329,488)                 (26,476)
    Total shareholders’ equity             2,700,674              2,222,245 
    Total liabilities and shareholders’ equity $       24,008,884  $       20,946,771 


     
    UNITED COMMUNITY BANKS, INC.
    Consolidated Statements of Income (Unaudited)
    (in thousands, except per share data)
      Three Months Ended
    December 31,    		 Twelve Months Ended
    December 31,
       2022   2021   2022   2021 
    Interest revenue:        
    Loans, including fees $197,330  $123,473  $673,402  $505,734 
    Investment securities, including tax exempt of $2,561, 2,293, $10,323 and $8,978  40,781   19,442   131,824   70,972 
    Deposits in banks and short-term investments  2,720   853   7,929   2,088 
    Total interest revenue  240,831   143,768   813,155   578,794 
    Interest expense:        
    Deposits:        
    NOW and interest-bearing demand  9,688   1,310   17,312   5,468 
    Money market  11,244   1,102   18,274   5,380 
    Savings  356   60   693   217 
    Time  3,498   392   5,820   3,780 
    Deposits  24,786   2,864   42,099   14,845 
    Short-term borrowings  480   —   507   — 
    Federal Home Loan Bank advances  1,424   1   1,424   3 
    Long-term debt  4,253   3,348   16,768   14,912 
    Total interest expense  30,943   6,213   60,798   29,760 
    Net interest revenue  209,888   137,555   752,357   549,034 
    Provision for credit losses  19,831   (647)  63,913   (37,550)
    Net interest revenue after provision for credit losses  190,057   138,202   688,444   586,584 
    Noninterest income:        
    Service charges and fees  9,519   8,613   38,163   33,868 
    Mortgage loan gains and related fees  3,104   10,910   32,524   58,446 
    Wealth management fees  5,835   6,117   23,594   18,998 
    Gains from other loan sales, net  1,504   3,761   10,730   11,267 
    Other lending and loan servicing fees  2,487   2,357   10,005   9,427 
    Securities (losses) gains, net  (184)  42   (3,872)  83 
    Other  11,089   5,377   26,563   25,729 
    Total noninterest income  33,354   37,177   137,707   157,818 
    Total revenue  223,411   175,379   826,151   744,402 
    Noninterest expenses:        
    Salaries and employee benefits  68,143   60,986   276,205   241,443 
    Occupancy  8,866   7,489   36,247   28,619 
    Communications and equipment  10,516   7,850   38,234   29,829 
    FDIC assessments and other regulatory charges  3,098   1,878   9,894   7,398 
    Professional fees  5,496   6,080   20,166   20,589 
    Lending and loan servicing expense  1,604   2,351   9,350   10,859 
    Outside services - electronic banking  3,954   2,670   12,583   9,481 
    Postage, printing and supplies  2,441   1,939   8,749   7,110 
    Advertising and public relations  2,052   1,760   8,384   5,910 
    Amortization of intangibles  1,619   1,103   6,826   4,045 
    Merger-related and other charges  1,470   9,912   19,375   13,970 
    Other  8,070   5,138   24,136   17,386 
    Total noninterest expenses  117,329   109,156   470,149   396,639 
    Net income before income taxes  106,082   66,223   356,002   347,763 
    Income tax expense  24,632   14,204   78,530   77,962 
    Net income $81,450  $52,019  $277,472  $269,801 
    Preferred stock dividends  1,718   1,718   6,875   6,875 
    Earnings allocated to participating securities  461   317   1,462   1,657 
    Net income available to common shareholders $79,271  $49,984  $269,135  $261,269 
    Net income per common share:        
    Basic $0.74  $0.56  $2.52  $2.97 
    Diluted  0.74   0.55   2.52   2.97 
    Weighted average common shares outstanding:        
    Basic  106,795   89,916   106,661   87,940 
    Diluted  106,916   90,089   106,778   88,097 


     
    Average Consolidated Balance Sheets and Net Interest Analysis
    For the Three Months Ended December 31,
    (dollars in thousands, fully taxable equivalent (FTE))
     
       2022   2021 
      Average
    Balance    		 Interest Average
    Rate    		 Average
    Balance    		 Interest Average
    Rate
    Assets:            
    Interest-earning assets:            
    Loans, net of unearned income (FTE) (1)(2) $15,002,836  $197,502 5.22% $11,689,412  $123,250  4.18%
    Taxable securities (3)  6,325,165   38,220 2.42   5,156,563   17,149  1.33 
    Tax-exempt securities (FTE) (1)(3)  490,838   3,440 2.80   387,638   3,080  3.18 
    Federal funds sold and other interest-earning assets  453,090   2,912 2.55   2,308,241   1,322  0.23 
    Total interest-earning assets (FTE)  22,271,929   242,074 4.32   19,541,854   144,801  2.94 
                 
    Noninterest-earning assets:            
    Allowance for loan losses  (152,551)      (103,167)    
    Cash and due from banks  217,873       141,967     
    Premises and equipment  297,523       245,869     
    Other assets (3)  1,166,424       1,036,760     
    Total assets $23,801,198      $20,863,283     
                 
    Liabilities and Shareholders’ Equity:            
    Interest-bearing liabilities:            
    Interest-bearing deposits:            
    NOW and interest-bearing demand $4,385,916   9,688 0.88  $4,080,621   1,310  0.13 
    Money market  4,628,585   11,244 0.96   4,323,851   1,102  0.10 
    Savings  1,480,908   356 0.10   1,187,134   60  0.02 
    Time  1,708,311   3,143 0.73   1,461,231   567  0.15 
    Brokered time deposits  51,258   355 2.75   65,556   (175) (1.06)
    Total interest-bearing deposits  12,254,978   24,786 0.80   11,118,393   2,864  0.10 
    Federal funds purchased and other borrowings  47,487   480 4.01   51   —  — 
    Federal Home Loan Bank advances  135,000   1,424 4.18   1,426   1  0.28 
    Long-term debt  324,590   4,253 5.20   247,251   3,348  5.37 
    Total borrowed funds  507,077   6,157 4.82   248,728   3,349  5.34 
    Total interest-bearing liabilities  12,762,055   30,943 0.96   11,367,121   6,213  0.22 
                 
    Noninterest-bearing liabilities:            
    Noninterest-bearing deposits  7,993,816       6,918,279     
    Other liabilities  383,270       354,665     
    Total liabilities  21,139,141       18,640,065     
    Shareholders’ equity  2,662,057       2,223,218     
    Total liabilities and shareholders’ equity $23,801,198      $20,863,283     
                 
    Net interest revenue (FTE)   $211,131     $138,588   
    Net interest-rate spread (FTE)     3.36%     2.72%
    Net interest margin (FTE) (4)     3.76%     2.81%


    (1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
    (2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
    (3) Unrealized gains and losses, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $454 million in 2022 and $1.64 million in 2021 are included in other assets for purposes of this presentation.
    (4) Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets.


     
    Average Consolidated Balance Sheets and Net Interest Analysis
    For the Twelve Months Ended December 31,
    (dollars in thousands, fully taxable equivalent (FTE))
     
       2022   2021 
      Average
    Balance    		 Interest Average
    Rate    		 Average
    Balance    		 Interest Average
    Rate
    Assets:            
    Interest-earning assets:            
    Loans, net of unearned income (FTE) (1)(2) $14,571,746  $673,491 4.62% $11,485,876  $504,015 4.39%
    Taxable securities (3)  6,284,603   121,501 1.93   4,446,712   61,994 1.39 
    Tax-exempt securities (FTE) (1)(3)  496,327   13,865 2.79   382,915   12,059 3.15 
    Federal funds sold and other interest-earning assets  1,065,057   9,104 0.85   1,680,151   4,784 0.28 
    Total interest-earning assets (FTE)  22,417,733   817,961 3.65   17,995,654   582,852 3.24 
                 
    Non-interest-earning assets:            
    Allowance for loan losses  (135,144)      (121,586)    
    Cash and due from banks  204,852       139,728     
    Premises and equipment  288,044       230,276     
    Other assets (3)  1,275,263       1,013,956     
    Total assets $24,050,748      $19,258,028     
                 
    Liabilities and Shareholders’ Equity:            
    Interest-bearing liabilities:            
    Interest-bearing deposits:            
    NOW and interest-bearing demand $4,486,263   17,312 0.39  $3,610,601   5,468 0.15 
    Money market  4,900,667   18,274 0.37   3,972,358   5,380 0.14 
    Savings  1,482,599   693 0.05   1,095,071   217 0.02 
    Time  1,693,307   5,152 0.30   1,529,072   3,663 0.24 
    Brokered time deposits  61,636   668 1.08   67,230   117 0.17 
    Total interest-bearing deposits  12,624,472   42,099 0.33   10,274,332   14,845 0.14 
    Federal funds purchased and other borrowings  13,004   507 3.90   44   — — 
    Federal Home Loan Bank advances  34,027   1,424 4.18   1,195   3 0.25 
    Long-term debt  323,102   16,768 5.19   276,492   14,912 5.39 
    Total borrowed funds  370,133   18,699 5.05   277,731   14,915 5.37 
    Total interest-bearing liabilities  12,994,605   60,798 0.47   10,552,063   29,760 0.28 
                 
    Noninterest-bearing liabilities:            
    Noninterest-bearing deposits  7,967,321       6,276,094     
    Other liabilities  377,221       322,566     
    Total liabilities  21,339,147       17,150,723     
    Shareholders’ equity  2,711,601       2,107,305     
    Total liabilities and shareholders’ equity $24,050,748      $19,258,028     
                 
    Net interest revenue (FTE)   $757,163     $553,092  
    Net interest-rate spread (FTE)     3.18%     2.96%
    Net interest margin (FTE) (4)     3.38%     3.07%

     

    (1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
    (2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
    (3) Unrealized gains and losses, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $277 million in 2022 and pretax unrealized gains of $28.7 million in 2021 are included in other assets for purposes of this presentation.
    (4) Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

     

    About United Community Banks, Inc.
    United Community Banks, Inc. (NASDAQ: UCBI) provides a full range of banking, wealth management and mortgage services for consumers and business owners. As of December 31, 2022, United had $24.0 billion in assets and 192 offices in Florida, Georgia, North Carolina, South Carolina, and Tennessee, along with a national SBA lending franchise and a national equipment lending subsidiary.  The company, known as "The Bank That SERVICE Built," has been recognized nationally for delivering award-winning service. In 2022, J.D. Power ranked United highest in customer satisfaction with consumer banking in the Southeast, marking eight out of the last nine years United has earned the coveted award. Forbes recognized United as one of the top ten World's Best Banks in 2022. Forbes also included United on its 2022 list of the 100 Best Banks in America for the ninth consecutive year. United also received ten Greenwich Excellence Awards in 2021 for excellence in Small Business Banking and Middle Market Banking, including national awards for Overall Satisfaction and Likelihood to Recommend. United was also named one of the "Best Banks to Work For" by American Banker in 2022 for the sixth consecutive year based on employee satisfaction. Additional information about United can be found at www.ucbi.com.

    Non-GAAP Financial Measures
    This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “pre-tax, pre-provision income,” “operating net income per diluted common share,” “operating earnings per share,” “tangible book value per common share,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “return on assets - pre-tax, pre-provision, excluding merger-related and other charges,” “return on assets - pre-tax, pre-provision,” “operating efficiency ratio,” and “tangible common equity to tangible assets.” These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United’s underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

    Caution About Forward-Looking Statements
    This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology, and include statements related to the expected financial returns of the Progress acquisition. Forward-looking statements are not historical facts and represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements.

    Factors that could cause or contribute to such differences include, but are not limited to (1) the risk that the cost savings and any revenue synergies from the Progress acquisition may not be realized or take longer than anticipated to be realized, (2) disruption of customer, supplier, employee or other business partner relationships as a result of the Progress acquisition, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of Progress may be greater than anticipated, (4) reputational risk and the reaction of the companies’ customers, suppliers, employees or other business partners to the acquisition of Progress, (5) the risks relating to the integration of Progress’ operations into the operations of United, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, (6) the risks associated with United’s pursuit of future acquisitions, (7) the risk of expansion into new geographic or product markets, (8) the dilution caused by United’s issuance of additional shares of its common stock in the Progress acquisition, and (9) general competitive, economic, political and market conditions. Further information regarding additional factors which could affect the forward-looking statements contained in this press release can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in United’s Annual Report on Form 10-K for the year ended December 31, 2021, and other documents subsequently filed by United with the United States Securities and Exchange Commission (“SEC”).

    Many of these factors are beyond United’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this communication, and United undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for United to predict their occurrence or how they will affect United or Progress.

    United qualifies all forward-looking statements by these cautionary statements.

    For more information:

    Jefferson Harralson
    Chief Financial Officer
    (864) 240-6208
    Jefferson_Harralson@ucbi.com


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